© 2013 All rights reserved.Chapter 8 Real Estate Mathematics 1

New York Real Estate for Salespersons, 5th e

By Marcia Darvin SpadaCengage Learning

© 2013 All rights reserved.Chapter 8 Real Estate Mathematics 2

Chapter 8

Real Estate Mathematics

© 2013 All rights reserved.Chapter 8 Real Estate Mathematics 3

Chapter 8 Key TermsAcreCommissionFront footGross incomeInterest

Net operating income

PointPrincipal Property tax rate

© 2013 All rights reserved. Chapter 8 Real Estate Mathematics 4

Commission ProblemsSales price x

Percentage of commission = Commission

If a salesperson lists and sells a property for $200,000 and receives 60% of the 7% commission paid to the employing broker, how much does the salesperson receive?

$200,000 x 0.07 =

$14,000

0.60 x $14,000 =

$8,400

© 2013 All rights reserved. Chapter 8 Real Estate Mathematics 5

Principal and Interest ProblemsLoan balance x rate of

interest = annual interest

A mortgage balance is

currently $43,627.14

and the amount of

interest applied to the

loan this month is

$309. What is the

annual interest rate?

$309 x 12 mos = $3,708

annual interest

3,708 ÷ $43,627.14 =

.0849929 = 8.5%

rounded

© 2013 All rights reserved.Chapter 8 Real Estate Mathematics 6

Calculating Area and Length

Rectangle area=

length x width

Square area = side x

side

Triangle area = (.05

x base) x height

Acre = 43,560 sq ft

A rectangular acre

of land has a width

of 165 feet. What is

the depth of the

property?

43,560 ÷ 165 =

264 feet

© 2013 All rights reserved.Chapter 8 Real Estate Mathematics 7

Property Tax RateAssessed value x tax

rate =annual taxes

If the assessed value of a property is $136,000 and the annual tax paid is $1,700, what is the tax rate per $100 of assessed value?

$1,700 ÷ $136,000 =0.0125 = $1.25

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Profit/Loss on Sale of Real Estate

Investment x percent of profit = dollars in profit

Investment x percent of loss =dollars lost

Jaycee purchases land in 2001 for $35,000. She plants trees in 2004 costing $15,500. In 2006, she sells the land for $46,000. What is her percentage of loss?

$50,500 - $46,000 = $4,500

$4,500 ÷ $50,500 = 8.91%, 9% rounded

Chapter 8 Real Estate Mathematics 8